It was a timid start to Wednesday’s trading, none of the European indices able to match the pace of gains seen in a record-setting Asian session.
Once again the FTSE started the day by trying, and failing, to put some distance between it and the magnetic lure of 6,500. A flat start left the index at 6,530, just below the upper ceiling of its trading over the last fortnight. Nothing at the moment would suggest it has the momentum to break through that level, though a strong showing from the US could be enough.
The FTSE’s biggest problem at the moment is sterling. While the currency got off to a tepid start, it doesn’t take a lot these days for the pound to hit fresh multi-year highs. A 0.2% rise against the dollar, for example, has pushed GBP/USD above $1.3835 for the first time since the very start of May 2018.
The greenback’s weakness in the face of Biden’s stimulus plan, the UK’s robust vaccine rollout, and the receding likelihood of the Bank of England imposing negative interest rates have allowed sterling to have a stellar start to the year.
Against the euro, meanwhile, the pound is hovering around €1.140, just a smidge below the 9-month, €1.1445 peak struck last week.
Elsewhere the Eurozone indices were similarly quiet. The DAX, what has spent the week retreating from the prospect of a fresh all-time high, dipped under 14,000 for the first time in 6 days. The CAC, in contrast, added 0.2%, though that wasn’t enough to push it past 5,700.
At the moment the Dow Jones is heading for a 50 point increase after the bell, enough to lift it to a record high of 31,430.
On the agenda this afternoon is the US inflation data, where the headline figure is expected to fall form 0.4% to 0.3% month-on-month.
Following that this evening is an appearance from Jerome Powell. Investors will be very keen to hear his thoughts on the Biden administration’s American Rescue Plan, and what that might mean for monetary policy going forwards.
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